Costing - Study Mode
[#606] In normal costing, budgeted rate is multiplied to an actual quantity, which have been used as allocation base to calculate
Correct Answer
(B) manufacturing overhead applied
Explanation
Solution: In normal costing, budgeted rate is multiplied to an actual quantity, which have been used as allocation base to calculate manufacturing overhead applied.
[#607] Budgeted annual indirect costs are divided to budgeted annual quantity of cost allocation base to calculate
Correct Answer
(C) budgeted indirect cost rate
Explanation
Solution: Budgeted annual indirect costs are divided to budgeted annual quantity of cost allocation base to calculate budgeted indirect cost rate. The budgeted indirect cost rate formula is calculated by dividing the budgeted annual indirect costs by the budgeted annual quantity of the cost allocation base.
[#608] Situation in which cost object has any job, customer or product is known as
Correct Answer
(A) cost application base
Explanation
Solution: Situation in which cost object has any job, customer or product is known as cost application base. Cost application base is a factor that is the common denominator for systematically relating a cost or a group of costs, such as factory overhead, to products.
[#609] If an allocated indirect cost is $1500 and actual incurred indirect cost is $1200, then this is classified as
Correct Answer
(D) over allocated indirect cost
Explanation
Solution: If an allocated indirect cost is $1500 and actual incurred indirect cost is $1200, then this is classified as over allocated indirect cost because the allocated amount is less than actual amount.
[#610] Cost of previous department is a part of
Correct Answer
(A) transferred-in costs
Explanation
Solution: Cost of previous department is a part of transferred-in costs. Transferred-in costs are costs accumulated during the upstream production processes within a company. Transferred-in costs are the costs accumulated by the product at any given point in production.